Understanding Surplus Funds in Mississippi Foreclosure Proceedings
Detailed Answer
When a lender forecloses on a Mississippi property, the foreclosure sale may generate funds beyond what is needed to repay the debt, interest, costs, and liens. These excess monies are called “surplus funds.” If you believe you are entitled to surplus proceeds, you must file a petition in the chancery court that handled the foreclosure.
Step 1: Review the Foreclosure Sale Records
Obtain the foreclosure sale report and confirmation order from the chancery court clerk. Confirm that the sale price exceeded the total debt and liens. The clerk’s file will show the surplus amount available.
Step 2: Identify the Proper Court and Case Number
Record the chancery court docket number assigned to the original foreclosure. You will file your petition in that same court. If you’re unsure which court handled the sale, contact the county chancery clerk or search online at your county’s official website.
Step 3: Prepare Your Petition
Your petition should include:
- The foreclosure case caption and docket number.
- A statement of your interest in the property or relationship to the prior owner.
- The sale date, sale price, and identified surplus amount.
- A request for an order disbursing the surplus funds to you.
Step 4: File and Serve the Petition
Submit your petition with the chancery court clerk and pay the filing fee. Mississippi law requires you to serve the foreclosure purchaser, the original borrower, any junior lienholders, and the trustee who conducted the sale. Follow the service rules in the Mississippi Rules of Civil Procedure.
Step 5: Attend the Hearing
The court will schedule a hearing to determine the rightful claimant of the surplus. Bring proof of your claim, such as title documents, lien records, or assignment agreements. After testimony, the chancery court issues an order directing the clerk to pay the surplus to the person entitled to it.
Applicable Mississippi Law
This process derives from the Mississippi Code governing foreclosure sales and distribution of surplus:
- Miss. Code Ann. § 89-1-55 (Effect of sale and confirmation).
- Miss. Code Ann. § 89-1-67 (Distribution of surplus funds).
Helpful Hints
- Obtain certified copies of all foreclosure sale documents.
- Confirm deadlines: file your petition promptly after sale confirmation.
- Check for junior liens that may claim the surplus.
- Consider consulting a Mississippi attorney if the surplus exceeds $5,000.
- Keep proof of service to avoid delays at the hearing.